UPDATE TO THE 2010 REGISTRATION DOCUMENT AND HALF-YEAR FINANCIAL REPORT

Transcription

1 UPDATE TO THE 2010 REGISTRATION DOCUMENT AND HALF-YEAR FINANCIAL REPORT Filed with the AMF on April 28, 2011 under No D Update on October 20, 2011 under No D A01 Only the French version of the update to the 2010 Registration document has been submitted to the AMF. It is therefore the only version that is binding in law. The original document was filed with the AMF (French Securities Regulator) on 20 October 2011, in accordance with article of the AMF s General Regulations. It may be used in support of a financial transaction only if supplemented by a Transaction Note that has received approval from the AMF. This document was prepared by the issuer and its signatories assume responsibility for it. Copies of this document may be obtained free of charge from the headquarters of Banque Fédérative du Crédit Mutuel. The document can also be downloaded in electronic format from the issuer s website ( Banque Fédérative du Crédit Mutuel Société Anonyme (Public Limited Company) with capital of 1,324,813,250 Headquarters: 34 rue du Wacken B.P Strasbourg Cedex Telephone: +33(0) Telegraphic address: CREDIMUT Facsimile address: CREMU X F Fax: +33(0) SWIFT address: BFCM FR 2A Trade Registry number: Strasbourg B

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3 CONTENTS Update by chapter of the 2010 Registration Document I. Person responsible for the update to the Registration Document Person responsible for the Registration document and its updates Declaration of the person responsible for the report... 5 II. Statutory Auditors... 6 III. Information about the issuer and trends Presentation of the company and Group Allocation of BFCM s share capital at July 28, Recent events and outlook... 9 IV. Administrative, management and supervisory bodies V. Financial information concerning patrimony, financial statement and results of the issuer Date of latest financial information Interim information Half-year financial report Statutory auditors report on the limited review of the first yearly financial information for Risk factors and uncertainties VI. Documents available to the public Documents available to the public Person responsible for the information VII. Table of concordance

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5 I. Person responsible for the update to the Registration Document 1.1. Person responsible for the Registration document and its updates Mr. Michel LUCAS, Chief Executive Officer of Banque Fédérative du Crédit Mutuel Declaration of the person responsible for the report I hereby declare to the best of my knowledge, and after having taken all reasonable precautions, that the information contained in the present update is in accordance with the facts and contains no omission likely to affect its import. I hereby certify that, to my knowledge, the financial statements for the most recent half-year have been prepared in accordance with applicable accounting standards and give a true and fair view of the assets, financial position and results of the Company and all entities included in the consolidated group, and the half-year report (pages 11 to16) included herein provides a true and fair view of the important events of the first six months of the current financial year, of the effect of such events on the Company s accounts, of the principal related party transactions, as well as a description of the principal risks and principal uncertainties for the six months remaining in the current financial year. I obtained a completion letter from the Statutory Auditors, KPMG Audit and Ernst & Young, in which they state that they have verified the information contained in the present update about the Group s financial position and accounts and that they have read the update in their entirety. Strasbourg, 20 October Chief Executive Officer Michel Lucas 5

6 II. Statutory Auditors Statutory auditors Principal Statutory Auditors Name, address and term of office of the Statutory Auditors of Banque Fédérative du Crédit Mutuel (BFCM) : a) Ernst & Young et Autres, a simplified limited liability company (S.A.S.) with variable capital, member of the Regional Institute of Accountants of Versailles, represented by Isabelle Santenac, 41 rue Ybry, Neuilly-sur-Seine. Start date of first term of office: September 29, Current term of office: 6 financial years with effect from May 12, Renewal: the General Meeting renewed the term of office of Ernst & Young et Autres as Statutory Auditors for a period of six years, i.e. until the end of the General Meeting called to approve the financial statements for the year ending December 31, b) KPMG Audit, member of the Regional l Institute of Accountants of Versailles, represented by Mr Jean-François Dandé 1, cours Valmy, Paris La Défense Cedex. Start date of first term of office: September 29, Current term of office: 6 financial years with effect from May 12, 2010 The General Meeting appointed KPMG as Statutory Auditors for a period of six years, i.e. until the end of the General Meeting called to approve the financial statements for the year ending December 31, KPMG Audit was the beneficiary of a universal transfer of assets from KMT Audit (whose first term of office dates back to the Extraordinary General Meeting of September 29, 1992) on June 30, Alternate Statutory Auditors: Cabinet Picarle & Associés, Malcom McLarty Resignation and non-renewal Not applicable. 6

7 III. Information about the issuer and trends 3.1. Presentation of the company and Group 3.2. Allocation of BFCM s share capital at July 28, 2011 Allocation of share capital Information on the ownership and direct or indirect control of BFCM by CM10-CIC Group and description of the nature of this control following the recognition of the most recent capital increase of July 28,

8 Shareholders No. of shares held % ownership (3) CF de CM (1) 24,625, % Caisses locales de Crédit Mutuel (2) members of FCM CEE, 133, % FCM SE, FCM IdF, FCM SMB, FCM MA, FCM C, FCM DV, FCM LACO, FCM M, FCM N Fédération du Crédit Mutuel CEE % CRCM ILE DE FRANCE PARIS 146, % CRCM SAVOIE MONT BLANC - ANNECY % CRCM MIDI ATLANTIQUE - TOULOUSE 24, % CRCM LOIRE ATLANTIQUE ET CENTRE OUEST - NANTES 741, % CFCM MAINE ANJOU ET BASSE NORMANDIE - LAVAL 222, % CRCM CENTRE- ORLEANS 272, % CRCM DE NORMANDIE - CAEN 124, % CFCM ANJOU - ANGERS 123, % CFCM ANTILLES-GUYANE - FORT DE FRANCE 2, % CRCM MEDITERRANEEN 75, % CRCM DAUPHINE VIVARAIS 2, % CFCM NORD EUROPE % CFCM OCEAN-LA ROCHE SUR YON % Individual directors % TOTAL 26,496, % (1) Caisse Fédérale de Crédit Mutuel (CF de CM) is a cooperative company in the form of a French corporation (société cooperative ayant la forme de société anonyme), affiliated with Confédération Nationale du Crédit Mutuel, which is more than 99% owned by the ACM Vie Mutuelle and the Caisses of Crédit Mutuel of the Crédit Mutuel Centre Est Europe, Crédit Mutuel Sud-Est, Crédit Mutuel Ilede-France, Crédit Mutuel Savoie Mont-Blanc, Crédit Mutuel Midi-Atlantique, Crédit Mutuel Centre, Crédit Mutuel Dauphiné Vivarais, Crédit Mutuel Loire Atlantique et Centre Ouest, Crédit Mutuel Méditerranéen and Crédit Mutuel Normandie federations. (2) The financially autonomous, variable-capital cooperative companies (sociétés cooperatives à capital variable) Caisses de Crédit Mutuel are owned by their individual share-owning members. (3) The percentage of voting rights is identical to the percentage of share ownership rights. Changes in the allocation of share capital between January 1, 2011 and July 28, 2011 A 22,621,000 capital increase in exchange for cash through the creation and issuance of 452,450 new shares occurred on July 28, 2011, in order to increase BFCM s share capital from 1,302,192,250 to 1,324,813,250. This capital increase reserved for the regional banks (CRCM) and local banks (CCM) of the Crédit Mutuel Centre, Crédit Mutuel Dauphiné Vivarais, Crédit Mutuel Loire Atlantique-Centre Ouest, Crédit Mutuel Méditerranéen and Crédit Mutuel Normandie federations was subscribed in the amount of 180,968,000, including share premiums, based on the following allocation: - CRCM Centre subscribed 99,000 BFCM shares (0.37%), - CRCM Dauphiné Vivarais subscribed 2,500 BFCM shares (0.01%), - CRCM Loire Atlantique-Centre Ouest subscribed 246,500 BFCM shares (0.93%), - CRCM Méditerranéen subscribed 75,000 BFCM shares (0.28%), - CRCM Normandie subscribed 25,000 BFCM shares (0.09%), Affiliation of the Caisses of Crédit Mutuel (CCM) at the time of the capital increase (10 BFCM shares per CCM): 99 CCM du Centre, 50 CCM de Dauphiné-Vivarais, 145 CCM de Loire Atlantique Centre Ouest, 90 CCM de Méditerranéen, and 58 CCM de Normandie. During this period, the BFCM share held by Caisse Interfédérale du Crédit Mutuel Sud Europe Méditerranéen (CIF SEM) was transferred to Caisse Fédérale de Crédit Mutuel (CF de CM), following the merger/absorption of CIF SEM by CF de CM. 8

9 3.3. Recent events and outlook After the release of the Registration Document, following recent events have concerned BFCM Group : Le Crédit Mutuel and Desjardins Group sign cooperation agreement. France s Crédit Mutuel and Desjardins Group of Canada cement their business ties by signing a set of agreements covering international development. (Press release of October 12, 2011, available on the website ) France s Crédit Mutuel and Canada s Desjardins Group, two cooperative, mutual bancassurance organisations which since their establishment have consistently focused on developing products and services for the benefit of their members and customers, today announced the signing of a worldwide cooperation agreement. The agreement between the two organisations - each named Bank of the Year 2010 for their respective countries by The Banker magazine - finds immediate practical expression in three advances in the fields of electronic payments and private banking. These advances as set out in the agreements are: - a project for the joint development of common technologies in the area of electronic means of payment, aimed at improving the performance of the solutions offered to merchants while at the same time reducing both banks production costs, - the opening of a CIC Banque Transatlantique office in Montreal (on Desjardins premises) to serve its customer base of French expatriates in Canada and to strengthen its ties with the world of Canadian finance, - the setting up of a Desjardins office in Paris in order to provide better international support to its corporate customers and also to act as Desjardins representative office vis-à-vis French businesses looking to develop in the Canadian and US markets. These agreements follow that signed in March 2011 between ESN North America (a subsidiary of CM-CIC Securities) and Valeurs Mobilières Desjardins concerning the distribution in Europe of research products on companies listed on the Toronto stock exchange. They also attest to the two cooperative, mutual groups determination: - to strengthen business ties between them, - to continue to improve their respective service offerings and optimise investments for the benefit of members and customers. This agreement, which follows long-standing partnerships in the field of property and casualty insurance, has been entered into in a context in which clear and differentiating advantages are derived from working together and sharing common values. Fitch rating has placed the large French bank on Rating Watch Negative (RWN), including the long term Issuer Default Rating (IDR) of BFCM Standard and Poor s has affirmed his rating on BFCM Complete reports (Fitch Ratings October 13, 2011 and Standard and Poor s October 14, 2011) are available on the website Outlook for BFCM in 2011 : Numerous risks continue to shadow the overall economic and financial outlook: There are still serious uncertainties as to some European countries capacity to implement the structural reforms required to enable them to continue to service their debt; The economic recovery could be weaker than expected, particularly due to a further slowdown in US economic activity and of the US property market; The low returns on conventional instruments and continuing low interest rates could prompt some operators to speculate imprudently, resulting in a leverage effect on risky assets and exacerbating or creating new financial imbalances. Given the above factors, economic growth continues to suffer periodic setbacks that make any forecasts difficult. In these uncertain conditions, continuation of the stronger operating trend observed in the first half of 2011 could be threatened, but it is difficult to quantify to what extent. Material changes in the issuer s financial position The main risk factors that could affect earnings for the current financial year are: 9

10 Impairment risk for the outstanding sovereign debts are supposed to progress, depending on the discussion in Europe; It cannot be ruled out that the risk of default on sovereign debt could lead to a liquidity crisis that could have a negative impact on banking activities, in particular on refinancing activities; Increased counterparty risk on customers and banks linked to deteriorating economic conditions, and Unfavourable volatility of stock and financial markets. Recent events specific to BFCM having a material impact on the measurement of its solvency On another front, on July 7, 2011, after obtaining the necessary authorisations, BFCM finalised the purchase of 50% of the capital of Banque du Groupe Casino. This transaction is not expected to have any material impact on BFCM s 2011 consolidated financial statements. There have been no other material changes in the Group s financial or commercial position since the end of the last financial year for which audited financial statements have been published that are likely to affect its solvency. IV. Administrative, management and supervisory bodies At the April 8, 2011 Board of Directors Meeting, Robert Laval and Fernand Lutz completed their terms of office as directors and were appointed to a three-year term as non-voting members. At the May 11, 2011 Shareholders Meetings, the appointments of Roger Danguel, Jean-Louis Girodot and Gérard Oliger were renewed for a period of three years. The coopting of Etienne Grad (to replace Marie-Paule Blaise) was ratified. The appointments of François Duret, Pierre Filliger, Eckart Thomä and Michel Vieux were approved for a three-year term. At the Board of Directors meeting that followed the Shareholders Meetings, the appointment of Michel Lucas as Chairman and Chief Executive Officer was renewed for the remainder of his term of office as a director, namely until May At the July 1, 2011 Board of Directors meeting, René Barthalay, Alain Demarre, Marie-Hélène Dumont, Jacques Pages, and Alain Teissier were appointed to three-year terms as non-voting members. Name Position Date of initial appointment Expiry of current mandate Representative Michel Lucas Chairman and CEO 09/29/1992 O5/11/2013 Jacques Humbert Vice Chairman 12/13/ /31/2011 Jean-Louis Boisson Director 12/17/ /31/2011 Gérard Bontoux Director 05/06/ /31/2011 CFCM Maine Anjou et Basse Normandie Director 07/04/ /31/2011 Jean Pierre Schneider Maurice Corgini Director 06/22/ /31/2011 Gérard Cormorèche Director 05/16/ /31/2012 Roger Danguel Director 12/13/ /31/2013 François Duret Director O5/11/ /31/2013 Pierre Filliger Director O5/11/ /31/2013 Jean-Louis Girodot Director 05/22/ /31/2013 Etienne Grad Director 12/17/ /31/2012 Jean Paul Martin Director 12/13/ /31/2012 Gerard Oliger Director 12/15/ /31/2013 Albert Peccoux Director 05/03/ /31/2011 Alain Tetedoie Director 10/27/ /31/2011 Eckart Thomä Director O5/11/ /31/2013 Michel Vieux Director O5/11/ /31/2013 Non-voting members René Barthalay, Yves Blanc, Michel Bokarius, Gérard Chappuis, Alain Demarre, Marie-Hélène Dumont, Monique Groc, Robert Laval, Fernand Lutz, Jacques Pages, Alain Teissier, Daniel Schlesinger 10

11 V. Financial information concerning patrimony, financial statement and results of the issuer 5.1. Date of latest financial information BFCM s latest reported financial information dates from June 30, Interim information Half-year financial report This heading includes the half-year activity report and the condensed consolidated financial statements of BFCM Group in the first half of Economic background: loss of confidence in developed countries sovereign debt Several negative events marked the first half of 2011, such as the Japanese earthquake and tsunami, a further slump in the US property market and in US economic activity and the persisting debt crisis in Europe. World economic growth is nonetheless expected to reach 4.3% for the first quarter of 2011 (annualised rate IMF estimate) thanks solely to the vitality of emerging countries, led by Asia, and to Germany s economic momentum within the euro zone. In France, activity rebounded in the first quarter (up by 3.9% on an annualised basis). However, it would seem that this strong performance is mainly attributable to technical catching up factors: chemicals and refinery production rebounded to wipe out the impact of the October 2010 strikes, while industrial production was boosted by stock rebuilding. At the end of the first half, the economic scene was dominated by the European debt crisis. The initial 110 billion rescue package granted by the EU and the IMF to Greece in 2010 finally proved to be inadequate. At the end of June, the Greek parliament was forced to approve yet another austerity package combining budgetary savings totalling 28 billion over four years and privatisations amounting to 50 billion. These measures were not enough to allay the markets doubts and on July 21, 2011 a second European rescue plan was agreed and further aid totalling 158 billion was granted to Greece in the form of loans. The case of Greece fuelled doubts as to developed countries effective ability to repay their debts; these fears have gradually extended beyond the euro-zone peripheral countries to all countries with significant fiscal deficits, including the United States which became bogged down in political debate on raising the debt ceiling. Up to now, the sovereign debt of developed countries had been considered free of counterparty risk; the end of this situation has plunged the market into a period of uncertainty. The BFCM group s activity in the first half The CM5-CIC group has become the CM10-CIC group Since January 1, 2011, five more Crédit Mutuel federations Centre, Dauphiné-Vivarais, Loire Atlantique Centre Ouest, Normandie and Méditerranéen have joined CM5-CIC, thereby creating the CM10-CIC group. These networks have joined Caisse Fédérale de Crédit Mutuel, BFCM s parent company. BFCM is the holding company for the CM10-CIC group and as such it is active in the capital markets to cover the group s refinancing needs. It also carries out financial engineering and holds the portfolio of equity interests. 11

12 Activity and results of BFCM s main subsidiaries in the first half of CIC Group The first half of 2011 featured ongoing growth in the customer base and the network, a decrease in impairment and loan loss provisions in retail banking and financing, growth in lending, deposits and insurance and service activities (remote banking, burglary protection and telephony). Outstanding loans totalled billion, up by 3.9% compared with June 30, 2010, deposits totalled 94.5 billion (up by 16.4%) and assets under management and in custody amounted to billion, 4.3% more than at June 30, Retail banking is CIC s core business and it continued to improve the quality of its network with the creation of 36 new points of sale. Net banking income for the half year ended June 30, 2011 came to 2,420 million compared with 2,376 million for the first half of Impairment and loan loss provisions decreased to 211 million (including a net charge of 70 million on the portfolio of Greek debt securities concerned by the EU support package) versus 220 million in Impairment and loan loss provisions as a ratio of outstanding customer loans dropped to 0.32%. The non-performing loans coverage ratio stood at 59.5%. CIC s consolidated net income for the first half of 2011 came to 526 million, corresponding to a contribution of 461 million to BFCM s consolidated net income under IFRS. CIC s activities and results are also reviewed in the analysis by sector of the results of the BFCM Group s different business lines for the period ended June 30, Groupe des Assurances du Crédit Mutuel Insurance turnover came to 4.47 billion in the first half of 2011, down by 13.2% compared with the same period in This decrease was mainly attributable to the sluggishness of the French life insurance market as a whole. Underwriting results for property and casualty insurance improved as 2010 had featured a series of natural disasters (storm Xynthia and hailstorms). GACM sold its Luxembourg reinsurance subsidiary ICM Ré in the first half, but continues to operate in Luxembourg through ICM Life. The insurance business line contributed 323 million to BFCM s consolidated net income under IFRS, 33% more than in the first half of Targobank After 2010, which had been marked by the switchover from the Citibank brand name to Targobank and by migration to the Group s IT systems, the beginning of 2011 saw the launch of new advertising campaigns that enabled the bank to increase its direct consumer credit against a dynamic economic background in Germany. Outstanding loans totalled 9.9 billion at the end of June while deposits amounted to 8.6 billion. Deposits declined during the first half due to the competition in terms of remuneration of these products in Germany. New synergies with the Group were achieved: for the first time, the Targobank network marketed a loan issued by BFCM in June 2011 to its customers. In terms of earnings, Targobank s contribution increased strongly, rising to 131 million (before amortisation of goodwill arising from the purchase price allocation) for the six months ended June 30, 2011, i.e. 73% more than in the first half of Cofidis Group Business activity in the first half was marked by the implementation in France of the Lagarde Consumer Credit Reform Act, which has required numerous adjustments to the way the business is managed. In particular, credit marketing procedures have been reviewed, with the introduction of onerous formalities for loan applications, which customers sometimes fail to understand, mandatory checks on the solvency of existing customers and a forced change in terms and conditions of repayment of existing loans. Despite these negative factors for business growth, Cofidis contribution to consolidated net income before amortisation of goodwill arising from purchase price allocation was up by 4% to 72 million. 12

13 Group activity and results of the BFCM Group Analysis of the consolidated statement of financial position (including securities lending transactions) The main developments affecting the consolidated financial position were as follows: - Loans to customers, including leasing transactions, amounted to 162,642 million at June 30, 2011 as against 156,433 million at June 30, Business held firm at the new subsidiaries (Targobank, Cofidis and CIC Iberbanco), with a loan book of 21 billion despite the difficult economic conditions. - Customer deposits totalled 112,237 1 million at June 30, 2011, up by 14% compared with 98,332 million at June 30, Analysis of the consolidated income statement In the first half of 2011, the BFCM Group s overall net banking income grew by 4.7% (at constant scope) to 4,479 million compared with 4,218 million in the half year to June 30, Operating expenses came to 2,539 million versus 2,468 million in the same period of the previous year. Impairment and loan loss provisions increased by 7.3% at constant scope, rising from 580 million in the first half of 2010 to 624 million in the first half of Moreover, on July 21, 2011, the EU Council agreed a new support package for Greece to fully cover its public financing gap, with the voluntary participation of the private sector. Consequently, an impairment charge of 76 million net of tax was recorded on the securities portfolio concerned by the support plan. The carrying amount of the Greek sovereign debt, borne mainly by the international entities, amounts to 746 million after this impairment charge. Overall net income for the period came to 916 million (compared with 835 million in the first half of 2010), of which 745 million attributable to equity holders of the parent. Analysis by activity: Description of business lines The business lines correspond to the BFCM group s organisation, which is described in greater detail in the notes to the financial statements: see note 3, which shows the organisation of the group by division, and note 2 showing the breakdown of the statement of financial position and income statement by activity. Retail Banking, BFCM s core business, consists of: The BECM network, CIC s network in the Greater Paris region and those of the CIC regional banks, the CIC Iberbanco branches, Targobank s network in Germany, the Cofidis Group outlets and the network of Banco Popular Hipotecario (BPH), together with all the specialised activities whose products are marketed through the retail network: consumer credit, equipment leasing and hire purchase, property leasing, seller credit, factoring, mutual fund management, employee savings plans and property. Insurance comprises Groupe des Assurances du Crédit Mutuel (GACM) and its subsidiaries whose products are marketed through the network. GACM operates in life and non-life insurance, insurance brokerage, reinsurance, burglary protection and car maintenance cover. Financing and capital markets covers two businesses: The financing of large corporate and institutional customers, value-added financing (project and asset financing, export finance, etc.), international activities and foreign branches. BFCM and CIC carry out their market activities through a single entity, CM-CIC Marchés, with a single management structure. Market activities are organised into three segments: Refinancing, Commercial and Proprietary. The transactions carried out at two locations (Paris and Strasbourg) are recorded in two balance sheets: * that of BFCM, for Refinancing * that of CIC, for Commercial and Proprietary; Private Banking comprises all the group s private banking operations in France (CIC Banque Transatlantique, Dubly-Douilhet SA) and abroad (Banque de Luxembourg, Banque CIC Suisse, Banque Transatlantique 1 Excluding outstandings under SFEF (Société de Financement de l'économie Française) issues, which are not included in customer deposits. 13

14 Luxembourg, CIC Private Banking-Banque Pasche, Banque Transatlantique Belgium and Banque Transatlantique London). Private Equity activities carried out on the group s own behalf now make a significant contribution to earnings. On January 1, 2011, the entities engage in private equity activities (CIC Finance, CIC Investissement, CIC Banque de Vizille and IPO) were grouped into a single division, CM-CIC Capital Finance. Structure and Holding groups together all the activities that cannot be allocated to any other division and all the purely logistical structures: intermediate holding companies, operating property held by special purpose vehicles and press activities. Retail banking (In millions) June 30, 2011 June 30, 2010 % change 2 Net banking income 3,148 3, % Gross operating profit 1,241 1, % Income before tax % Net income % In the first half of 2011, BFCM continued to focus on the needs of its retail, professional, association and business customers. Growth in CIC s retail banking business enabled it to: - Attract 69,872 new customers (including 10,187 professional and 605 business customers) bringing its total customer base to 4,417,658 (+ 1.6 %); - Increase outstanding loans by 4% to 99.5 billion with a 4.4% increase in home loans and an 8.4% increase in investment loans; - increase deposits by 21.5% to 68.7 billion; - record a 6% increase in the number of non-life insurance contracts, bringing the total to 2,807,288; - And achieve growth in all its services activities (remote banking: + 7.1% to 1,488,357 contracts, telephony: % to contracts, burglary protection: % to 61,384 contracts, etc.). Net banking income from the retail activities for the first half of 2011 was down by 1.4% at constant scope to 3,148 million (of which 703 million for Targobank and 605 million for Cofidis) compared with 3,172 million in the first half of Operating expenses remained flat at 1,907 million. Impairment and loan loss provisions amounted to 413 million versus 603 million at June 30, Net income from retail banking activities came to 573 million for the period ended June 30, 2011 compared with 445 million for the same period the previous year. Insurance (In millions) June 30, 2011 June 30, 2010 % change Net banking income % Gross operating profit % Income before tax % Net income* % *including an impairment charge of 6.4 million in respect of Greek securities 2 At constant scope 14

15 Insurance turnover came to 4.3 billion, down by 14% overall with a 26% decrease in life insurance. The total invested in life-insurance savings products came to 53.1 billion, up by nearly 7% year on year. Net insurance revenues came to 648 million in the first half of 2011 compared with 512 million in the same period the previous year. Income before tax came to 476 million versus 346 million in the period ended June 30, Financing and capital markets (In millions) June 30, 2011 June 30, 2010 % change Net banking income % Gross operating profit % Income before tax % Net income* % *including an impairment charge of 7.3 million in respect of Greek securities Income before tax came to 443 million for the first half of 2011 versus 499 million for the half year ended June 30, 2010 on net banking income of 632 million compared with 580 million in the same period the previous year. Income before tax from finance activities grew by 33% to 208 million while net banking income was up by 6% to 235 million. Net reversals of impairment and loan loss provisions came to 17 million for the period ended June 30, 2011 compared with a net charge of 25 million in the same period the previous year. Income before tax from capital market activities decreased from 342 million in the first half of 2010 to 234 million in the first half of 2011 while net banking income rose from 357 million to 396 million over the same period. Net allocation to impairment and loan loss provisions amounted to 63 million in the first half of 2011 compared with net reversals of provisions amounting to 83 million the previous year. Private banking (In millions) June 30, 2011 June 30, 2010 % change Net banking income % Gross operating profit % Income before tax % Net income* % *including an impairment charge of 31 million in respect of Greek securities as at June 30, 2011 Income before tax dropped from 44 million in the first half of 2010 to 27 million in the first half of 2011, while net banking income rose from 198 million to 233 million. The division s commercial performance was satisfactory despite the crisis. Private equity (In millions) June 30, 2011 June 30, 2010 % change Net banking income % Gross operating profit % Income before tax % Net income % For the first half of 2011, the private equity business reported income before tax of 77 million versus 87 million in the first half of 2010 and net banking income of 95 million versus 100 million in the first half of

16 The Crédit Mutuel-CIC group provides its client businesses with long-term support through an investment portfolio of 1.8 billion. Structure and Holding (In millions) June 30, 2011 June 30, 2010 % change 3 Net banking income (241) (288) -2.3% Gross operating profit (409) (437) -7.9% Income before tax (518) (455) +12.5% Net income* (371) (333) +9.5% *including an impairment charge of 31.4 million in respect of Greek securities as at June 30, 2011 Net banking income from the Structure and Holding division comprises: - Revenues totalling 109 million from the Structure and Other activities, comprising the revenues from the logistics subsidiaries of Targobank and Cofidis, and the press groups sales margins; - The Holding activities recorded an operating loss of 350 million arising in particular from a shortfall in working capital ( 169 million), the cost of refinancing Targobank ( 110 million), amortisation of goodwill arising from the acquisition of Targobank and Cofidis ( 100 million), CIC s expansion plans and dividends from shareholdings in associates. Shareholders equity and super-subordinated securities tokens of financial strength amounted to 16.9 billion. Condensed consolidated financial statements of BFCM group in the first half 2011 The consolidated financial statements presented herein have been prepared in accordance with IAS34. 3 At constant scope 16

17 Assets - IFRS In millions June 30, 2011 Dec. 31, 2010 Notes Cash and amounts due from central banks 10,110 6,543 4a Financial assets at fair value through profit or loss 51,164 40,120 5a Derivatives used for hedging purposes a, 6c Available-for-sale financial assets 67,602 68,041 7 Loans and receivables due from credit institutions 63,990 65,415 4a Loans and receivables due from customers 162, ,542 8a Remeasurement adjustment on interest-rate risk hedged portfolios b Held-to-maturity financial assets 10,608 8,926 9 Current tax assets a Deferred tax assets 1,025 1,168 12b Accruals and other assets 12,896 14,723 13a Equity-accounted investments 1,539 1, Investment property Property, plant and equipment 1,934 1,965 16a Intangible assets b Goodwill 4,092 4, Total assets 390, ,264 Liabilities and shareholders' equity - IFRS In millions June 30, 2011 Dec. 31, 2010 Notes Due to central banks b Financial liabilities at fair value through profit or loss 41,318 34,194 5b Derivatives used for hedging purposes 2,228 2,457 6a, 6c Due to credit institutions 36,635 38,193 4b Due to customer 119, ,325 8b Debt securities 101,921 94, Remeasurement adjustment on interest-rate risk hedged portfolios ,331 6b Current tax liabilities a Deferred tax liabilities b Accruals and other liabilities 6,753 10,429 13b Technical reserves of insurance companies 57,205 55, Provisions 1,371 1, Subordinated debt 8,634 8, Shareholders' equity 14,441 13,581 Shareholders' equity - Group share 11,341 10,430 Subscribed capital and issue premiums 1,880 1,880 22a Consolidated reserves 8,813 7,508 22a Unrealised or deferred gains and losses c Net income for the year 745 1,405 Shareholders' equity - Minority interests 3,099 3,151 Total liabilities and shareholders' equity 390, ,264 17

18 CONSOLIDATED INCOME STATEMENT - IFRS In millions June 30, 2011 June 30, 2010 Notes IFRS Interest income 7,163 7, Interest expense -4,991-5, Commission income 1,476 1, Commission expense Net gain on financial instruments at fair value through profit or loss Net gain (loss) on available-for- sale financial assets Income from other activities 5,491 5, Expenses on other activities -4,578-5, Net banking income - IFRS 4,479 4,218 Operating expenses -2,401-2,324 29a,29b Depreciation, amortisation and provisions on non-current assets c Gross operating income - IFRS 1,941 1,750 Cost of risk Operating income - IFRS 1,317 1,169 Share of income/(loss) of affiliates Gains or losses on other assets Net income before tax - IFRS 1,355 1,197 Income tax Net income Net income attributable to minority interests Net income - Group share Net earnings per share in euro* * diluted earnings per share are identical to net earnings per share Net income and gains and losses recognized directly in shareholders' equity In millions June 30, 2011 June 30, 2010 Notes - IFRS Net income Translation adjustments 5 29 Remeasurement of available-for-sale financial assets Remeasurement of hedging derivative instruments Remeasurement of non-current assets 0 0 Share of unrealized or deferred gains or losses of affiliates -4 5 Total gains and losses recognized directly in shareholders' equity c,22d Net income and gains and losses recognized directly in shareholders' equity 1, Of which Group share Of which minority interests Items relating to gains and losses directly accounted for in shareholders' equity are presented net of tax 18

19 STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY In millions Capital Additional paidin capital Retained earnings (1) Translation differences Unrealised or deferred capital gains/losses (net of corporation tax) Net income for the period Total equity attributable to equity holders of the parent Non-controlling interests Total consolidated shareholders' Change in fair value of available-for-sale assets Change in fair value of hedging derivatives Shareholders' equity at January 1, , , ,409 2,881 12,290 Capital increase Appropriation of 2009 earnings Dividends paid in 2010 in respect of Sub-total: movements arising from shareholder relations Change of unrealised or deferred gains and losses recognized in shareholder's equity Income for the first half of Sub-total Impact of changes in group structure Translation adjustments Shareholder's equity at June 30, , , ,749 2,945 12,695 Shareholders' equity at July 1, , , ,749 2,945 12,695 Appropriation of 2009 earnings Dividends paid in 2010 in respect of Sub-total: movements arising from shareholder relations -3-3 Change of unrealised or deferred gains and losses recognized in shareholder's equity Income for the second half of Sub-total Impact of changes in group structure Translation adjustments Shareholder's equity at December 31, , , ,405 10,430 3,151 13,581 Shareholders' equity at January 1, , , ,405 10,430 3,151 13,581 Capital increase Appropriation of 2010 earnings 1,405-1,405 Dividends paid in 2011 in respect of Sub-total: movements arising from shareholder relations 1,405-1, Change of unrealised or deferred gains and losses recognized in shareholder's equity Income for first half of Sub-total , ,207 Impact of changes in group structure Translation adjustments Shareholder's equity at June 30, , , ,341 3,099 14,441 (1) At June 30, 2011, reserves comprised the legal reserve for 130 million, statutory reserves for 1,242 million and other reserves for 7,445 million. 19

20 STATEMENT OF NET CASH FLOWS In millions First half 2011 First half 2010 Net income Income tax Income before tax 1,355 1,197 +/- Net depreciation/amortization expense on property, plant and equipment and intangible assets Impairment of goodwill and other non-current assets 0 0 +/- Net additions to provisions and impairment /- Share of income/loss of affiliates /- Net loss/gain on investment activities /- (Income)/expenses on financing activities 0 0 +/- Other movements 601-1,114 = Total non-monetary items included in income before tax and other adjustments /- Cash flows relating to transactions with credit institutions -5, /- Cash flows relating to transactions with customers /- Cash flows relating to other transactions affecting financial assets or liabilities -2,085-4,119 +/- Cash flows relating to other transactions affecting non-financial assets or liabilities -2, Taxes paid = Net decrease/increase in assets and liabilities from operating activities -10,172-3,692 TOTAL NET CASH FLOW RELATING TO OPERATING ACTIVITIES -8,229-3,455 +/- Cash flows relating to financial assets and investments in non-consolidated companies /- Cash flows relating to investment property /- Cash flows relating to non-current assets TOTAL NET CASH FLOW RELATING TO INVESTMENT ACTIVITIES /- Cash flows relating to transactions with shareholders /- Other net cash flows relating to financing activities 6, TOTAL NET CASH FLOW RELATING TO FINANCING ACTIVITIES 6, IMPACT OF MOVEMENTS IN EXCHANGE RATE ON CASH AND EQUIVALENTS Net increase/decrease in cash and equivalents -1,482-2,270 Net cash flow relating to operating activities -8,229-3,455 Net cash flow relating to investment activities Net cash flow relating to financing activities 6, Impact of movements in exchange rates changes on cash and equivalents Cash and cash equivalents at beginning of period -4,805 4,667 Cash and accounts with central banks and post office banks 6,499 6,790 Demand loans and deposits - credit institutions -11,304-2,123 Cash and cash equivalents at end of period -6,287 2,397 Cash and accounts with central banks and post office banks 9,880 3,995 Demand loans and deposits - credit institutions -16,167-1,598 CHANGE IN CASH AND EQUIVALENTS -1,482-2,270 20

21 Notes to the half-year financial statements The notes to the financial statements are presented in millions of euro. Note 1: Accounting policies, valuation methods and presentation Theaccounting policies applied are the same as those used for the preparation of the financial statements for the financial yearended December 31, 2010 Pursuant to regulation (EC) 1606/2002 on the application of international accounting standards and regulation (EC) 1126/2008 on the adoption of said standards, the consolidated financial statements have been drawn up in accordance with IFRS as adopted by the European Union at June 30, These standards include IAS 1 to 41, IFRS 1 to 8 and any SIC and IFRIC interpretations adopted at that date. Standards not adopted by the European Union have not been applied. The financial statements are presented in accordance with CNC recommendation 2009-R.04. All IAS and IFRS were updated on November 3, 2008 by regulation 1126/2008 which replaced regulation 1725/2003. These standards are available on the European Commission s website at: These interim financial statements are presented in accordance with IAS 34 relating to interim financial reporting, which provides for the publication of condensed financial statements. They supplement the annual financial statementsfor the year ended December 31, 2010, presented in the 2010 registration document. Thegroup's business is not subject to seasonal or cyclical effects. Estimates and assumptions may have been used in the valuation of balance sheet items.. Standards and interpretations New standards - - Amendments to existing standards IAS 24 : Related Party disclosures Improvements to IFRSs Interpretations IFRIC 14 : Prepayments of a Minimum Funding Requirement IFRIC 19 : Extinguishing Financial Liabilities with Equity Instruments Standards adopted in 2010 and 2011 and applicable as from January 1, /23/ /22/ /23/ /27/2010 Comment No impact No impact No impact No impact NOTE 2 - Breakdown of statement of financial position and income statement by business activity and by geographic region Thegroup'sactivities are as follows: Retail banking, comprising CIC's regional bank network, Targobank in Germany, Cofidis, Banco Popular in Spain, Banque Marocaine du Commerce Exterieur and all the specialist activities marketed through the banking network: real estate and equipment leasing, factoring, mutual fund management, employee savings plans andrealestate. Insurance, carried out through Groupe des Assurances du Crédit Mutuel. Financing and market activities, comprising: a) financingof major companies and institutional customers, specialistfinance, international andforeign subsidiaries; b) market activities in the broader sense i.e. interest-rate, foreign-exchangeandequity market trading both forcustomers andon the bank'sown account, includingstock-market brokerage. Private banking, through dedicatedcompaniesinfrance and abroad. Private equityon own accountand financialengineering, groupedin aspecificbusiness line. The logistics and holdingdivision, whichcomprisesall the elementsnot allocatedto any specific businessline andthe logistics structures: intermediate holdingcompanies, realestate usedin operationsand heldbyspecific entities,and IT companies. The consolidated entities are wholly allocated to their business lines based on their contributions to the consolidated accounts, with the exception of CIC and BFCM whose activities cover several business lines. In these cases, the parent company financial statements are brokendownanalytically and their assets and liabilities are broken downin the same way. 2a - Breakdown of income statement by business activity June 30, 2011 Retail Insurance Financing Private Private Structure Inter Total banking and markets banking equity and holding activities Net banking income 3, ,479 General and administrative expense -1, ,539 Gross operating income 1, ,940 Cost of risk Net gain (loss) on disposal of other assets Net income before tax ,355 Income tax Net income Non-controlling interests 172 Net income - Group share 745 Significant events during the period - Greek sovereign debt: impairmentwas recognised in thecost of riskinamounts of 44 million for private banking, 39 millionforinsurance, 11 millionformarket activitiesand 48 millionforthe holdingactivity. - BancaPopolare di Milano: goodwillamountingto 41 millionwaswritten off at the level of the holdingcompany. June 30, 2010 Retail Insurance Financing Private Private Structure Inter Total banking and markets banking equity and holding activities Net banking income 3, ,218 General and administrative expense -1, ,468 Gross operating income 1, ,750 Cost of risk Net gain (loss) on disposal of other assets Net income before tax ,197 Income tax Net income Non-controlling interests 155 Net income - Group share

22 2b - Breakdown of financial position by geographic region ASSETS June 30, 2011 December 31, 2010 France Rest of Other Total France Rest of Other Total Europe countries* Europe countries* Cash, central banks, post office banks - Assets 4,164 1,251 4,695 10,110 1,400 1,166 3,977 6,543 Financial assets at fair value through profit or loss 49, ,243 51,164 37,453 1,080 1,586 40,120 Hedging derivative instruments - assets Available-for-sale financial assets 61,146 5,525 1,022 67,693 60,611 6,189 1,241 68,041 Loans and receivables due from credit institutions 57,058 4,358 2,574 63,990 57,632 4,841 2,942 65,415 Loans and receivables due from customers 137,714 21,595 3, , ,087 21,371 3, ,542 Held-to-maturity financial assets 10, ,608 8, ,926 Equity-accounted investments , ,589 LIABILITIES Cash, central banks, post office banks - Liabilities Financial liabilities at fair value through profit or loss 40, ,318 32,486 1, ,194 Hedging derivative instruments - Liabilities 1, ,228 2, ,457 Amounts due to credit institutions 23,250 10,164 3,221 36,635 20,979 13,446 3,768 38,192 Amounts due to customer 97,121 21, ,514 92,862 22, ,325 Debt securities 85,700 7,806 8, ,921 76,856 9,985 7,805 94,646 * USA, Singapore, Tunisia and Morocco 2c - Breakdown of income statement by geographic region June 30, 2011 June 30, 2010 France Rest of Other Total France Rest of Other Total Europe countries* Europe countries* Net banking income 3, ,479 2, ,218 General and administrative expense -1, ,539-1, ,468 Gross operating income 1, ,941 1, ,750 Cost of risk Net gain (loss) on disposal of other assets ** Net income before tax 1, ,355 1, ,197 Net income Net income - Group share * USA, Singapore, Tunisia and Morocco ** including net income/loss of entities accounted for using the equity method and goodwill impairment NOTE 3 - Consolidation scope The changes in the consolidations scope relative to December 31, 2010 are as follows: entry into consolidation scope: Société Foncière et Financière de Participations mergers/acquisitions: CIC Investissements merged with CMCIC Investissement, Financière Voltaire merged with CMCIC Capital Finance, Société Foncière et Financière merged with CMCIC Capital Finance, IPO merged with CMCIC Investissement and IPO Ingénérie with CMCIC Capital Finance exit from consolidation scope: Vizille de Participations (ceased trading), ICM Ré (disposal). A. Banking network Banque de l'economie du Commerce et de la Monétique % % Method % % Method Control Interest * Control Interest * FC FC Banque du Crédit Mutuel Ile-de-France (BCMI) FC FC CIC Ouest (formerly Banque CIO - BRO) FC FC CIC Nord Ouest (formerly Banque Scalbert Dupont - CIN) June 30, 2011 December 31, FC FC Crédit Industriel et Commercial (CIC) FC FC CIC Est FC FC CIC Iberbanco FC FC CIC Lyonnaise de Banque (LB) FC FC CIC Sud Ouest (formerly Société Bordelaise - SBCIC) FC FC Targobank AG & Co. KGaA FC FC B. Subsidiaries of banking network Banca Popolare di Milano 5 4 EM 5 4 EM Banco Popular Hipotecario PC PC Banque de Tunisie EM EM Banque Marocaine du Commerce Extérieur (BMCE) EM EM C2C FC FC CM-CIC Asset Management FC FC CM-CIC Bail FC FC CM-CIC Home Loan SFH (formerly CM-CIC Covered Bonds) FC FC CM-CIC Epargne salariale FC FC CM-CIC Gestion FC FC CM-CIC Laviolette Financement FC FC CM-CIC Lease FC FC CM-CIC Leasing Benelux FC FC CM-CIC Leasing GmbH FC FC Cofidis Argentina FC FC Cofidis Belgium FC FC Cofidis Spain FC FC Cofidis France FC FC Cofidis Italy FC FC Cofidis Czech Republic FC FC Cofidis Romania FC FC Cofidis Slovakia FC FC Creatis FC FC 22